According to Deloitte’s 2020 Global Healthcare Outlook, healthcare systems around the world are facing the same issues: rising healthcare costs, changing patient demographics, evolving customer expectations, new market players, complex health and technology ecosystems. Healthcare stakeholders need to invest in value-based care, innovative care delivery models, advanced digital technologies, data interoperability, and alternative employment models to prepare for these uncertainties and build a smart health ecosystem.
To grasp these opportunities and tackle these future threats, hospital leaders are turning to their supply chain leaders. The supply chain touches every department within the hospital and each dollar saved is a dollar available to be invested in helping more patients. But the process of getting the right product, to the right place, at the right time, at the right price remains a challenging and often-times elusive goal.
Supply chain leaders within healthcare are experiencing a combination of four main industry trends:
(i) consolidation - as health systems move to manage a broader portfolio of locations, the supply chain becomes increasingly complex and challenging to oversee.
(ii) cost reduction – as many of the world’s hospitals and health systems continue to experience a decline in funding and reduced revenue from delayed procedures, administrators are continuing to look to their supply chain for cost reduction efforts.
(iii) distribution and supplier model changes - shortages and supply chain disruptions are leading manufacturers in other industries to branch into medical supplies and many providers are reconsidering traditional hospital-supplier relationships.
(iv) data-driven decision making - a 2020 GHX survey found improving demand forecasting emerged as a top priority for the healthcare industry as a result of the COVID-19 pandemic.
COVID-19 has also highlighted the disruption that can happen in the healthcare supply chain, with the World Health Organization warning that severe and mounting disruption to the global supply of personal protective equipment (PPE) – caused by rising demand, panic buying, hoarding and misuse – is putting lives at risk. Although the requirement for proper PPE has been widely acknowledged, procuring and distributing the correct equipment for each clinical setting has been a worldwide challenge.
Common hospital supply chain challenges
Given their experience with healthcare customers over the years, TechnologyOne has identified six key inventory management pain points commonly faced in hospital operations:
(i) stock wastage – in many cases, the revolution in supply chain management within hospitals over the last ten years has not gone far enough. Procurement systems that do not integrate with patient administration systems are only doing half the job of inventory management.
(ii) manual and paper processes - like the paperless office, the paperless hospital remains elusive today. But shifting to an electronic system from a paper-based system is widely expected to improve the efficiency, quality, and safety of medical care.
“Removing manual processes has been a game-changer for us; we have reduced errors, seen significant time savings and now have a clear understanding of live inventory,” said David White, National Group Manager - Prosthesis and Rebates, Healthscope.
(iii) item recording and tracking - seamless data capture, from devices, equipment, medicine and people, can help procurement functions identify whether stock losses are due to quality problems, physician preference or some other cause that may warrant investigation. The use of barcodes has helped to improve positive patient identification and care and reduce pharmacy dispensing errors.
The process also provides greater visibility across the supply chain, helping to reduce stock wastage.
(iv) inaccurate billing and funding claims - without accurate, uniform and easy to use methods of recording patient fees and government funding, there are risks such as lost revenue and potential to overcharge payers, including patients, health insurance providers and, via Medicare, the Federal Government.
(v) supplier management - historically, supplies and supply data have often been siloed within organisations, so that key information for efficient business operations can be difficult to access.
Hospital procurement leaders are now looking to ensure their systems and processes are integrated internally first, and then looking to do the same with their suppliers.
(vi) poor reporting and analysis - moving processes from manual, paper-based and analogue, to automated, digital and cloud-based is only the first step. The true value of digital transformation comes with the ability to apply analytics across the organization, to transform information into knowledge, and allow the organization to make positive changes driven by evidence.
Healthcare organisations must find solutions that will address both data challenges: access to and use of information. Easy to use dashboards and data visualisation tools are important in liberating the value of data that is generated and captured by hospital procedure management systems for use by the organization’s leadership.
Click here to download TechnologyOne’s full report on developing a solid foundation for hospital procedure management.